Consider a Stackelberg duopoly with the following inverse demand function: P = 100 ? 2Q1 ? 2Q2. The firms' marginal costs are identical and are given by MCi = 2. Based on this information, the Stackelberg follower's marginal revenue function is:
A. MRF(QL,QF) = 100 ? QL ? 2QF.
B. MRF(QL,QF) = 100 ? 2QL ? 4QF.
C. MRF(QL,QF) = 100 ? 4QL ? 2QF.
D. MRF(QL,QF) = 100 ? 2QL ? QF.
Answer: B
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Table 14.2Monetary Aggregates of the U.S. Financial SystemItemAmountCash held by public$100 billionTransactions deposits$300 billionRequired reserves$30 billionExcess reserves$0 billionU.S. bonds held by public$475 billionAssume an original balance sheet: The total money supply (M1) in Table 14.2 is
A. $400 billion. B. $430 billion. C. $100 billion. D. $905 billion.
If interest rates increase, the present value of a given payment in the future will
A) cause an inflation. B) remain the same. C) increase. D) decrease.
Using the above figure, in the absence of any government intervention, the number of tons of paper produced will be
A) 60 million tons. B) 80 million tons. C) 100 million tons. D) 120 million tons.
When considering changes in tax policy, economists usually focus on
A) people's ability to pay taxes. B) the marginal tax rate. C) the average tax rate. D) people's willingness to pay taxes.